Hong Kong to support rocket, satellite IPOs as SpaceX-led sector takes off

Hong Kong plans to amend its listing rules to attract IPOs from China's burgeoning space sector, led by SpaceX. The move aims to capitalize on the surge in activity in the industry, driven by Beijing's priorities and the success of SpaceX's June IPO. According to Hong Kong Chief Executive John Lee Ka-chiu, the Hong Kong Exchanges and Clearing (HKEX) will consult on revising Chapter 18C of the city's listing rules in the first half of next year.

This revision aims to draw enterprises in emerging sectors such as aerospace, allowing them to raise capital in Hong Kong and solidify the city's position as a financing hub for new economy enterprises. Chapter 18C, introduced in 2023, already defines special listing rules for companies in five technology sectors, placing commercial aerospace under advanced hardware and software.

The consultation will review the market capitalization threshold, which has been temporarily reduced for pre-revenue companies since August 2024. Edward Au Chun-hing, a managing partner at Deloitte China, believes the consultation could further ease requirements for research and development milestones, commercialization, and disclosure standards.

Hong Kong has already attracted some peripheral aerospace-related firms, such as Shanghai Top Numerical Control Technology and Adaspace Technology, which focuses on building AI computing facilities in space. As of the end of August, IPOs in Hong Kong raised a total of HK$340 billion, surpassing last year's total. However, the city's exchange is now behind the Nasdaq in global IPO venues due to the SpaceX listing.

HKEX chairman Carlson Tong expressed optimism about working with the Hong Kong government and other stakeholders to bolster the city's role as a premier gateway for capital, opportunities, and ideas between China and the world.